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Dow, S&P 500 edge lower; Hartford soars on news it will exit annuities
NEW YORK (AP) ' Stocks were mostly lower Wednesday on Wall Street following a bumpy start to the week.
The Dow Jones industrial average was down 45 points at 13,125 in the first two hours of trading, giving up an earlier gain of 20. The Standard & Poor's 500 index was down three points to 1,402, and the Nasdaq composite was down less than a point at 3,073.
The declines were broad. Only three of the 10 industry groups in the S&P 500 index rose. Aluminum maker Alcoa led the Dow lower with a decline of 1.2 percent.
Hartford Financial jumped 4.3 percent after the company said it would get out of the annuity business and focus on property and casualty insurance, group benefits and mutual funds. Hedge fund manager John Paulson had urged Hartford to spin off businesses.
Green Mountain Coffee Roasters soared 8.3 percent. The company said it was expanding its partnership with Starbucks to sell Starbucks' Vue coffee packs for use in Green Mountain's Keurig single-cup machines. The news relieved investors concerned that Starbucks' new single-cup Verismo coffee machine might be a competitive threat to Keurig.
FSI International, which makes equipment for producing microelectronics, jumped 10 percent after the company reported that orders skyrocketed in the latest quarter, helping the company beat analysts' forecasts.
Baker Hughes fell 4 percent after the oil-field services company said its profit margin would fall below last quarter's as companies shift from crude to natural gas exploration. Baker Hughes is facing shortages of raw materials used in its pressure pumping business, a decline in fleet usage and higher-than-expected personnel and logistics costs.
The yield on the 10-year Treasury note fell to 2.32 percent from 2.36 percent late Tuesday. The dollar fell against the euro. Gold and crude oil prices rose slightly.
Stocks closed lower on Tuesday for only the second time in two weeks after two reports suggested an economic slowdown in China. Supercharged economic growth in China over the past three years has helped sustain the global economic recovery. The Dow closed down nearly 69 points, its biggest loss in two weeks.
The Dow is still up 1.6 percent this month and 7.7 percent so far this year. Other indexes are up even more in the year to date: The S&P 500 is up 11.7 percent, the technology-focused Nasdaq composite 18.1 percent.
In a research report Wednesday, Goldman Sachs analysts urged investors to dump bonds and put money into stocks. The report argues that the weak economic growth in the United States and Europe is not universal, and that the 2010s could be the strongest period for world growth between 1980 and 2050.
It also argues that, while Japan's two decades of economic stagnation in the 1990s and 2000s are a tempting comparison to what the U.S. and Europe face today, Japanese stocks were far more overvalued before Japan entered its decline.
"We think it's time to say a 'long goodbye' to bonds, and embrace the 'long good buy' for equities as we expect them to embark on an upward trend over the next few years," the report says.